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In 2025, the gold price increased by over 67%, repeatedly reaching new highs, which has been a bright spot. At the beginning of 2026, the London gold price declined to $4,300 per ounce, prompting the discussions regarding the overall trend of gold for the year. According to analyses from various financial institutions, the gold market is expected to experience a pattern of "volatility with underlying strength, stabilization in the early period followed by upward momentum" throughout 2026. The fundamental drivers of the bull market remain intact, although price volatility has intensified.
Investment institutions generally remain optimistic about the outlook of gold prices. Goldman Sachs has set a target price of $4,900 per ounce, UBS forecasts gold could reach $5,000 within the first three quarters, and JPMorgan Chase projects a potential rise to $6,000 by the fourth quarter. While the value of gold continues to rise in 2026, a sustained one-sided surge is unlikely. The first half of the year is anticipated to experience a phase of consolidation, followed by an accelerated upward trajectory in the second half. Gold prices are expected to fluctuate between $4,200 and $4,400 per ounce in the first quarter, with an estimated annual return of 10%–15%.
Three primary factors underpin the gold prices:
Firstly, the Federal Reserve's rate cut cycle. It is projected that the Fed will implement cumulative rate cuts of 50 basis points by 2026. A dovish candidate may accelerate monetary easing, thereby reducing the cost of holding non-yielding assets such as gold.
Secondly, the sustained gold purchases by global central banks. Goldman Sachs anticipates an average monthly acquisition of 70 tons. The ongoing trend of de-dollarization further strengthens demand for gold as a reserve asset.
Thirdly, persistent geopolitical tensions and macroeconomic uncertainties. Developments in Latin America and the escalation of the Russia-Ukraine conflict have heightened demand for safe-haven assets. A tight supply-demand balance has further contributed to price appreciation. Nonetheless, certain risks warrant attention. Should the U.S. economy remain resilience than anticipated, leading to delayed or reduced rate cuts by the Fed, gold prices could face downward pressure and undergo a moderate correction. Additionally, a slowdown in central bank buying or a de-escalation of geopolitical tensions may induce short-term fluctuations of gold. However, these factors are unlikely to reverse the long-term upward trend of gold. From an investment perspective, gold should serve as a strategic "ballast" in portfolio allocation. For household investors, the recommended allocation to gold should range between 5% and 10%. A disciplined approach—such as dollar-cost averaging or phased purchasing during price dips—is advised. For more active traders, watch closely key events is necessary, including Federal Reserve policy meetings, which is essential to ensure investment decisions align with individual risk tolerance and promote rational decision-making.Complete digital access to quality Glebors financial topic with expert analysis from industry leaders.
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